Many companies reach a point in their development where they could benefit from an advisory board. It is all too easy in today’s complex business world to get caught up in an ‘echo chamber’ of ideas and perspectives that only originate internally.
For many business owners, an understandable first question about the concept is: what should my advisory board look like? To find an answer, start by envisioning the ideal size and composition of your company’s board in terms of skill sets and personalities.
The guest list
First and foremost, participants in your advisory board should have skills, experience, and expertise that complement your company’s in-house staff. Second, they should support your established long-term strategic goals.
Ideal board candidates can think creatively and provide constructive advice while maintaining discretion with sensitive business issues. This allows the board to honestly discuss every aspect of your operations, including:
- Current challenges
- Emerging opportunities
- Managerial dynamics
Selecting advisory members is similar to selecting friends and colleagues to invite to an intimate dinner party. You want a diverse mix of backgrounds, expertise, and skills. For example, try to balance impulsive, assertive personalities with more thoughtful, cautious ones.
An evolving entity
Bear in mind that, as your business needs change, you may need to rotate some board members out and bring in new blood. For instance, if the company needs to upgrade to a new technology platform to minimize data breaches, board members who were invaluable when the company began, and technology perhaps played a less prominent role, may lack the experience needed to take the business through the next phase.
In addition, the size of your board may change over time. Generally, business owners should limit the number of members to three to seven people. This will help keep the board affordable and manageable, particularly in terms of effective deliberation and decision making. However, it may need to grow beyond that in number if your company itself gets larger.
Innovation & competition
Sage advice and diversity of opinion can be invaluable when looking to innovate and gain a competitive edge. Please contact our firm for help assessing if now is the time for your business to form an advisory board.